Overview: from January to may, the crude steel output of steel increased in China by 27.81% year on year, and the output of bearing steel increased by 22.08% year on year. Looking back on the bearing steel market in June, affected by the off-season demand, the market demand of related varieties of premium special steel has obviously weakened, and China’s bearing steel market price is also weak. So far, the average price of bearing round steel 50 mm (continuous casting) is 6470 yuan / ton, 320 yuan / ton lower than that at the end of May, with a month on month decrease of 4.71%. Recently, the steel pipe plants and forging plants are weak in orders, while the bearing steel enterprises are insufficient in actively reducing production, which reflected the increase of social warehouse and factory warehouse. At present, the demand is still affected by the off-season, and it is difficult to release it by a large degree. It is expected that the market price of bearing steel may show a trend of volatility and weakening in July.
I. Output of bearing steel in China
Output of bearing steel from January to may 2021: both crude steel and steel increased year on year.
According to the data of the Special Steel Enterprises Association of China, the output of cruel bearing steel was 1.9756 million tons in China's main excellent special steel enterprises from January to may 2021 , an increase of 32.03% compared with the same period last year. From January to may 2021, the output of bearing steel of China's main excellent special steel enterprises is 1.6929 million tons, an increase of 26.12% compared with the same period last year.
II. Market performance of bearing steel in China
In June, the prices of bearing steel in China showed a downward trend, and the overall market performance was not good. Due to the particularity of the season, the whole country is hot and rainy, and the overall inventory is large in June. The orders of some high-end bearing manufacturers are great. In addition, the current market is falling again, which alleviates the risk of high price in the early stage and digests part of resources, which plays a certain role in supporting the price. The space for price decline in the later stage is limited. However, the feedback from the current situation shows that the demand of automobile, engineering, wind power and other downstream industries is not optimistic, and the demand for bearing steel may remain low. In view of the limited supporting effect of demand on the price, coupled with the continuous release of steel production capacity, it is expected that the market price of bearing steel in July will show a weakening trend.
III. Relevant market information
(1) Price of raw materials
The market performance of common carbon scrap is relatively strong, with the average price at the end of the month at 3215 yuan / ton. At the beginning of this month, the arrival of steel scrap continued to decline, and scrap prices continued to rise. Later, as the price of thread steel continued to decline, the profits of steel mills were greatly compressed, the price of scrap was depressed one after another. However, due to the tight supply of scrap, the decline of scrap price was not large.
(2) Downstream industry
According to the statistics of China Automobile Industry Association, in May 2021, the production and sales of automobiles were 2.04 million and 2.218 million, with a month on month decrease of 8.7% and 5.5%, and a year-on-year decrease of 6.8% and 3.1%. From January to May this year, automobile consumption remained stable on the whole. Judging from the market, the production and sales of automobiles in this month decreased year on year. Looking forward to the future, China's economic operation is stable and strengthening, which plays a good supporting role in the stability of automobile consumption. However, the global epidemic is still spreading, the global economic recovery is uneven, and China’s economic recovery foundation is not solid, which also brings difficulties for automobile industry.
IV. Conclusion
In June, the market price of bearing steel is still weak, the demand is obviously affected by the off-season, and the inventory accumulation speed is accelerated. At present, the price gap between GCr15 and 45# carbon structural steel has expanded, and the price gap of some steel plants has reached 600-800 yuan / ton. Recently, the demand of bearing steel pipe plants and forging plants has declined obviously, the end users are more cautious in purchasing, and downstream industries still worried. The output of bearing steel production enterprises is high. Under the high inventory pressure, capital flow and risk control are particularly important.
From the perspective of demand, the southern region entered a continuous high temperature after ending of plum rain season in July, so it is difficult to recover demand. In addition, the release of steel production capacity is not reduced, it is expected that the bearing steel market may show a trend of weakening in July.